Record-Keeping and Accounting Tips for 1099ers

Developing good record-keeping and accounting habits is essential for 1099 workers. This is because the burden is on you, not an employer, to complete most accounting tasks. Follow these tips to improve your approach to accounting and position your business for financial success.

Keep proper records

Your 1099 form isn't the only form 1099 workers need to keep handy to appease Uncle Sam at tax time. When completing an income statement, you will need records on income received and expenses incurred. Or, if creating a balance sheet, you will need access to data on your assets, liabilities and equity. You will need to well-kept records to accurately report income and deductible expenses. If you ever face an audit, the IRS will ask for this documented proof.  There are a variety of records the IRS advises keeping:

 
• Gross receipts, such as 1099-MISC forms, invoices or cash register tapes
 
• Purchase records such as credit card receipts, canceled checks or invoices
 
• Expense records such as credit card receipts, canceled checks or petty cash slips
 
• Asset records detailing how and when you acquired the asset, the asset price and cost of improvements
 
• Employment tax records such as your EIN or amounts and dates of wages, annuities and pension payments

You can track any information not captured on a form in a journal, ledger or via electronic means. You should keep records for at least 3 years after you file but there's no harm in holding on to it for longer.